Exxon gains access to Arctic oil in exchange for teaching Russians to frack

Exxon gains access to Arctic oil in exchange for teaching Russians to frack

Excerpt

The following is from the August 31, 2011, edition of The Dallas Morning News. Bruce Bullock, director of SMU's Maguire Energy Institute, provided expertise for this story.

September 2, 2011

By ELIZABETH SOUDER
Staff Writer

Exxon Mobil Corp. signed a deal Tuesday with Russia’s Rosneft that gives the Irving energy giant access to oil in the Arctic in exchange for teaching the Russians to use technology developed in North Texas.

The companies plan a $3.2 billion exploration program for the Kara Sea on the Arctic Ocean and the Black Sea, they said in a joint news release. Rosneft, Russia’s state-owned oil company, will have the option to invest in Exxon drilling projects in the Gulf of Mexico and shale oil fields in Texas that rely on new hydraulic fracturing technology to produce. The companies will also study developing shale oil resources in Siberia.

The deal is similar to one that Rosneft signed with BP PLC earlier this year, but that deal unraveled in May. . .

Russia cannot afford to let Western Europe get ahead in the fracking game. Already, Exxon and others have plans to drill in Germany, Poland and other areas of Europe that buy gas from Russia.

“They are a one-horse economy,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University. “They need the dependence” on the oil industry.

Russia’s economy is dependent on petroleum for about 60 percent of export revenue. Russian policies are also important for world oil supplies, as Russia now pumps more oil than Saudi Arabia. Yet Russia’s online fields in Siberia are in decline, threatening the prosperity and geopolitical clout that has come with oil wealth over the last decade.